With the news that a group of Dutch film companies are suing the Dutch government for alleged inaction on piracy, it seems worth re-upping this piece from 2011 about movie production and piracy in the EU. In short, we’d argue that there’s a widespread misunderstanding of how IP and EU cultural politics really interact. Here’s part of it:
For better and for worse, European film operates within a system of high public subsidies, low production costs, and persistent cultural and institutional market barriers at the national level. The last estimate (in 2004) by the European Audiovisual Observatory put direct public subsidies for audiovisual production at around 1.3 billion euros. The resulting industry is a major success if measured by the quantity of production, and arguably also in terms of cultural diversity and ‘quality’ of the kind associated with the auteur tradition. But the European cinema also remains resolutely ‘national,’ with a high proportion of revenues coming from domestic distribution and relatively few films attaining wider European (or global) success.
Some of this insularism reflects linguistic and cultural differences within Europe. And some of it reflects the fragmentation of the European market. The burden of rights clearance across 27 countries and innumerable production companies makes it very difficult to distribute European films widely within Europe–and far more difficult, in particular, than licensing large catalogs from the six US studios. The EC has made reducing these market barriers a high priority, but has shown less certainty about how to move forward. As EC reports have noted:
the practice of territorial licensing has a lot to do with commercial decisions based on the structure of a European market that is characterised by linguistic and cultural differences, as well as by high transaction costs in distributing local content across borders. (p.185)
In other words, it’s not clear where the market obstacles stop and the mismatch of product with demand begins.
TERA Associates has released a follow up to their 2010 study on the impact of “piracy” on creative industries in the European Union. The new study, entitled “The Economic Contribution of the Creative Industries to EU GDP and Employment,” makes three arguments:
1) That the creative industries include 8.3 million “core” creative jobs and 5.7 million “interdependent” and “non-dedicated support” jobs, totaling 14% of the EU27 workforce and contributing 6.8% of GDP (€ 860 billion).
2) That between 2008 and 2011, piracy “destroyed” € 27.1 – 39.7 billion in economic value, resulting in a loss of between 64,089 and 955,125 jobs. According to TERA’s forecast, these numbers are likely to climb to € 166-240 billion by 2015, with 600,000 to 1.2 million jobs lost.
3) That although economic depression and other factors may play a role in some sectoral changes (such as retail), these job and economic losses are primarily attributable to the failure of EU member states to adopt stronger IP enforcement measures.
As a researcher responsible for several studies of the impact of piracy on creative economies, I was asked by consumers’ and citizens’ rights groups in 2011 to provide an independent review of the first TERA study. In those comments, I argued that the report offered a selective account of the economics of infringement that overstated the impact of piracy. Since the new report doubles down on those findings and introduces some new methodologies, I have prepared new comments.
What else is going on in Greece these days? Did you guess: a major crackdown on Greek file sharing sites?
On this subject, I’m very pleased to publish a guest essay by Dr. Petros Petridis of Panteio University in Athens.
File Sharing and the Greek Crisis
petros.petridis at gmail.com
According to the major copyright industry groups, Greece has among the highest rates of “piracy” in the European Union. The Business Software Alliance recently put this number at 61% of the software market—exceeded only by Romania and Bulgaria. The IFPI listed Greece in its top ten ‘priority countries’ for music piracy in 2006. The US Trade Representative’s office has kept Greece on its “Watchlist” of badly behaving countries since 2008.
It is easy to see file sharing through the lens of the larger Greek crisis—as part of the wider breakdown and circumvention of formal institutions. But the file sharing story in Greece is both simpler and more complicated than that.
With the takedown of Library.nu (formerly Gigapedia), the major US and UK publishers are joining the war on file sharing. This is a subject we’ll be paying a lot of attention to in the next couple years. Coincidentally, I gave a talk more or less on this issue at the O’Reilly Tools of Change conference on Tuesday.
Modernize how public funding agencies conceive their mission, with an emphasis on much wider and cheaper distribution of EU movies. We propose:
Making public funding contingent on creative commons commercial use licensing of the work after an initial period of commercial release (provisionally, five years). The CC license would allow works to circulate at no cost, without requiring permission from the rightsholder.
In which we deploy evidence, including World Bank data and a list of the top 100 pirated movies, to argue that it does not make sense! And that the French position (that of our own peuple) makes the least sense of all!
Most of the time, the international politics of intellectual property law are pretty easy to follow: countries that are large exporters of intellectual property usually favor stronger international IP agreements that help exploit international markets. Countries that are large importers of IP, in contrast, generally favor lower levels of IP protection that minimize the outflow of royalties, licensing fees, and other payments for foreign-owned products and technologies–whether computers, drugs, movies, or books. Whatever other rhetorics are in play, from the rights of authors to the right to development, political positions usually line up with those underlying incentives.
So a lot is going on in the EU on the intellectual property front these days! Let’s run down the past six weeks or so.
Our last post was about the release of the Hargreaves Review, the UK government funded study of IP policy in the digital economy that called out a lot of bad industry research, made some good recommendations for reform, and punted on enforcement. This followed on the heels of a British court ruling against a group of local ISPs, who were challenging the Digital Economy Act on the grounds that it was incompatible with wider European law. The ‘three strikes’ provisions of the act are now likely to go forward.